TRB's profit fell 81%
Companies: Tribal Group plc
Tribal Group (LSE: TRB), reported in-line interims this morning showing revenue down 22%, operating profit down 81%, but reporting cash flow of £4.6m, up 244%.
During the period, education services company Tribal saw revenue decline significantly as the company wound down its QAS Ofsted contract, disposed of Synergy and closed non-core businesses.
The group's effective cost reduction program, intended to drive margin improvement in H2 and save £8.5m by the year end and the closing of a number of new deals has helped the group regain momentum
Discussing today's interims, broker N+1 Singer said it would upgrade PBT and EPS forecasts due to lower interest costs but would make no changed to EBIT:
"Substantial progress has been achieved, with stability restored and new deals won. The group de-risked major contract challenges and restructured the workforce which will deliver £8.5m of annualised savings. The group has a valuable customer base, domain expertise, and now the leadership team and vision to execute a plan supported by a strengthened balance sheet. In the medium-term, we believe the group is capable of generating mid-teens EBIT margin, which coupled with top line momentum, should drive substantial returns over current levels."
Ian Bowles, Chief Executive, said:
"I am pleased to report that the first half of the year has seen progress in line with the Board's expectations, as we take actions to address the financial and operational challenges the Group faced at the beginning of the year. As previously highlighted, our profits in 2016 are weighted towards the second half of the year, as we see the H1 cost saving actions flowing through, improved utilisation in the Implementation teams, and seasonal skewing of results in Professional and Business Solutions. Our expectations for the full year are unchanged."
